In 2006, "Ahold's former CEO Cees van der Hoeven and former CFO Michiel Meurs were found guilty of fraud in one of the biggest financial scandals in Europe. Both men were fined and received 9 month suspended sentences. The executives were prosecuted for inflating sales through their U.S. Foodservice Inc. subsidiary by over $1 billion and improperly recording sales from four subsidiaries in Scandinavia, Argentina and Brazil. Ahold restated its earnings from 1999 to 2002 by $5 billion less than originally reported, and company shares lost two-thirds of their value as a result." (washingtonpost.com) This occurred three years after Ahold nearly went into bankruptcy.

While the executives did not gain any personal benefit from the scandal, they lost the trust in their investors, employees, and accountants as a result. The company did not face criminal prosecution, however sixteen former executives and suppliers of U.S. Foodservice have been charged with crimes and 13 of them, including Mark P. Kaiser. Kaiser the former marketing chief, was sentenced to seven years and a fine of $50,000 in 2007.

For a company rocked by such a large scandal, Ahold is doing quite well today, with a growth in revenue of 3.3% from 2007 to 2008, and approximately 116,000 employees. Hopefully such with such a large run-in with legal trouble and media, Ahold will be clean of any possible fraud claims.

Sources:

http://www.greenamericatoday.org/programs/responsibleshopper/company.cfm?id=283

http://www.pr-inside.com/ahold-financial-and-operations-analysis-r1488076.htm

http://www.washingtonpost.com/wp-dyn/content/article/2006/09/28/AR2006092801782.html

In response to the question 'what is Ahold's view on genetically modified products', they reply, "Where there are clear, demonstrable benefits to consumers, Ahold has no principle objections to the responsible use of safe biotechnology. Products made with this technology need the approval of the regulatory authorities, based on their safety and environmental impact." (ahold.com). And, in 2002, consumers showed concern over the United States chain of Ahold (dba Giant) stocking irradiated meat in their stores. Irradiation, a process that kills bacteria, has not been tested thoroughly for safety. In addition, Giant underwent controversy when claims of false advertising comparing irradiated meat to pasteurized milk were made.

While Ahold seems to support GMO products, they are improving upon their organic product line. According to the 2008 Corporate Responsibility Report, there were 3,481 certified organic products in Stop & Shop/Giant-Landover stores in the United States. This includes the Nature's Promise corporate brand, which is generally well-recieved by consumers. However, there has been some criticism of the uneccessary over-packaging of products as well as the questioning of the quality and legitimacy of the certifications and labels on the products.

Ahold also has organic lines in other countries, "Among them is Albert Heijn’s organic line, Biologisch, which has been credited by consumer organizations with driving a significant increase in the consumption of organic products in the Netherlands in recent years. Likewise, ICA’s own organic line – which was rebranded in 2008 as “I love eco” – is meeting customer demand for these kinds of products." In Sweden, sales of these products rose by 50%, and by 20% in Norway in 2008. While Ahold seems to be on the right track for offering organic foods and healthy options in its stores, one must be critical of the certification and credibility of products in such large corporations.

Sources

http://www.greenamericatoday.org/programs/responsibleshopper/company.cfm?id=283&MajorSub=1&CompanyName=Giant%20Food%20LLC%20%28Ahold%20USA%2C%20Inc%20subsidiary%29

http://www.lime.com/business/story/2204/organic_goes_generic

http://www.ccrereport2008.ahold.com